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EU Fails to Agree on Climate Change Before UN Summit

Just ahead of a major UN summit on climate change in Poland, EU states are struggling to agree on their approach. The host country isn't the only member state that finds it hard to stick to earlier agreements.

Some say it's time to stop subsidizing out-dated industries

Chancellor Angela Merkel had made the challenge of fighting global warming the cornerstone of Germany's EU presidency back in 2007.

Since then, the 27-nation-bloc has hammered out the so-called 20-20-20 goals to be achieved by the year 2020 that entail a 20 percent reduction in carbon emissions from 1990 levels, a 20 percent reduction in overall energy consumption and an increase in renewable use to 20 percent of all energy sources.

The problem is getting all member states on board to support the ambitious targets. At an EU summit in October, Poland and Italy, both eager to protect national industries, said they had problems with meeting the targets and threatened to veto the plan. They only came on board after some key decisions were delayed until the next meeting on Dec.11-12.

No EU consensus before UN summit

This means that when the UN climate change talks convene for 10 days starting Dec. 1 in the Polish city of Poznan, the European Union will be unable to present a unified front.

The difficulties in coming to a consensus came to the fore on Monday when the member states failed to agree on one small detail of the overall package -- penalties that automakers will have to pay if they breach emission targets.

Putting beefy cars on C02 diet hurts German auto industry

The European automobile industry faces a double burden to reduce carbon emissions and buy allowances for the CO2 they do produce that exceeds the set targets. It is likely that member states will approach the mid-December negotiations with diverging views on a French proposal to limit CO2 emissions to 130g/per kilometer for 65 percent of new cars in 2012, to be increased to the full 100 percent in 2015.

Since French and Italian carmakers tend to produce smaller, compact vehicles, they would have less trouble meeting the targets than the Germans, who manufacture many more beefy, gas-guzzling luxury sedans.

"Polluter pays" principle tough for German carmakers

The "polluter pays" principle is a tough pill for the German automakers to swallow, given that the overall industry is already facing a decline in consumer demand, due in part to the credit crunch triggered by the financial crisis.

Next year, Germany, which is Europe's biggest economy, also faces an election period, making it less likely to cede ground when it comes to protecting its industrial and manufacturing sectors.

A draft of the current text also calls for energy intensive industries to pay for the right to pollute, beginning in 2013, a proposal that is also unpopular in Germany where much of heavy industry is still based in the Ruhr Valley.

An economic ministry report that was leaked to the German press on Tuesday said that more than 100,000 jobs would be lost if the EU makes Germany pay for pollution rights.

Trouble getting Poles and Italians on board

The current French EU presidency also faces the challenge of getting the Italians and Poles on board.

Poland, which joined the EU in 2004 along with other eastern European states, relies far more heavily on coal to produce energy than its western counterparts. Its liberal government headed by Prime Minister Donald Tusk has even threatened to torpedo the climate change deal, if other EU members do not take into account the additional burdens on Poland's growing economy. French President Nicolas Sarkozy plans to visit Poland in early December to assuage those energy concerns.

Italian Prime Minister Silvio Berlusconi's opposition to the EU proposals on climate change are tied to what he views as an unfair burden on Europeans in limiting carbon emissions when the United States and the bloc of emerging nations called BRIC for Brazil, Russia, India and China, are far bigger polluters.

"Yes, we have to manage to limit CO2 emissions, but this must be done with a global agreement, because it's not conceivable that the EU should be the only one to do it when the other major producers of CO2 don't," he said at a press conference.

Denmark's example

Climate deal needs to look at burden on growing economies

Although the global financial crisis has put environmental goals on the back burner for the moment, the sense or urgency it generated has shown that governments can cooperate, take initiatives and face challenges in a way that would have been inconceivable only a few months ago, according to Connie Hedegaard, Denmark's energy minister.

"We are now facing the same sense of urgency when it comes to climate and energy issues," said Hedegaard in an interview with the DPA news agency. "That is one encouraging lesson to be learned from the financial crisis."

Asked how she would win over the Poles and Italians, Hedegaard explained the Danish position.

"In the 1970s, we were 99 percent dependant on fossil fuel imports," she said. "It became so bad that we had to prohibit people from driving their cars on Sundays. Today, 17 percent of our energy consumption comes from renewable sources, such as wind, biomass and biogases. And our energy-efficient technologies have turned out to be one of our best export sectors. So what appeared as a cost in the beginning has turned out to be a source of profit, also in terms of job creation.

"I would tell them that I am not so sure that the way ahead for Europe is to protect the industries of yesterday."